Circular Letter No. CC/2021/00000056

Circular Letter No. CC/2021/00000056 Sent to: Credit Institutions. Mod. 40000375/T – 01/14 Subject: Revision of the EBA Guidelines on sound remuneration policies (EBA/GL/2021/04)

The European Banking Authority (hereinafter referred to as the EBA) published on July 2, 2021, the document entitled “Guidelines on sound remuneration policies under Directive 2013/36/EU” (EBA/GL/2021/04), addressed to competent authorities, credit institutions, and systemically important investment firms, which will enter into force on December 31, 2021, and which will repeal the “Guidelines on sound remuneration policies under Articles 74(3) and 75(2) of Directive 2013/36/EU and disclosures under Article 450 of Regulation (EU) No 575/2013”, published on December 21, 2015 (EBA/GL/2015/22). These Guidelines can be consulted on the EBA’s institutional website (1), as well as the Portuguese language version, published on October 29, 2021 (2).

The aforementioned document resulted from the revision conducted by the EBA on the current guidelines in this matter arising from legislative changes introduced in Directive (EU) 2013/36 of June 26, 2013 with the publication of Directive (EU) 2019/878 of May 20, 2019. Some of the provisions contained in the Guidelines regarding payments resulting from early termination of functions and retention bonuses were also clarified with a view to strengthening the specific framework applicable to these types of remuneration.

Institutions included within the scope of application of these Guidelines should, from now on, adopt the necessary measures to implement the new requirements at the level of their remuneration policies and practices with a view to complying with them from December 31, 2021.

The Bank of Portugal emphasizes the importance of institutions giving due compliance to the guidelines contained in the document in question, which must be followed and applied in the context of current legislation and regulation and, in particular, function, whenever legally possible, as a complement to the provisions contained in the General Regime of Credit Institutions and Financial Companies regarding this matter.

(1) https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Guidelines/2021/1016720/Draft%20Final%20report%20on%20GL%20on%20remuneration%20policies%20under%20CRD.pdf (2) https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Guidelines/2021/EBA-GL-2021-04%20Guidelines%20on%20sound%20remuneration%20policies/Translations/1023120/GL%20on%20remuneration%20policies%20under%20CRD_PT.pdf